When people say they either want or are required to carry “full coverage” on their Michigan auto insurance policy they are referring to insuring their car for physical damage.
Physical damage is optional car insurance and is comprised of two coverage options: Comprehensive & Collision.
These two types of coverage are commonly confused – both insure your car, but cover different types of damage.
Comprehensive coverage, sometimes referred to as “Other Than Collision”, insures your vehicle for damages other than a collision with another car or object.
Comprehensive coverage includes:
- Theft
- Fire
- Vandalism
- Weather-related damage (hail, wind, flooding)
- Falling objects
- Hitting a deer or other animal
- Glass breakage
Comprehensive coverage includes a deductible – the amount of any covered loss you will need to pay before receiving insurance benefits.
Deductibles for comprehensive typically range from $100 to $1,000 with many insurance companies offering a glass benefit to pair with comprehensive coverage that reduces or eliminates the deductible for common glass repair or replacement claims.
Comprehensive customarily insures an automobile for the car’s actual cash value (ACV), which factors in depreciation. You can use online resources, such as Kelley Blue Book or AutoTrader, to get a good idea of the current value of your vehicle.
In the event of a covered comprehensive loss your insurance company will pay the full cost to repair your vehicle, less the deductible, up to the actual cash value. If the cost of repairs is likely to exceed the ACV your insurance company will declare it a total loss and pay the sum of your car’s ACV to help you replace the vehicle.
It’s worth noting comprehensive insurance typically does not insure personal belongings inside your car – those types of items would separately be covered by your home, condo, or renter’s insurance.